Jacob Dwalo Ariaro v Gulf African Bank Limited

Legal Officer, Lawi Sato sworn on 20th January 2026. The parties canvassed the application by way of written submissions which together with the pleadings I have considered and I will be making relevant references to the same in my analysis and determination below. Analysis and Determination 3. The Plaintiff’s application is grounded under Order 40 Rules 1,2 & 4 of the Civil Procedure Rules which provide as follows: 1. Cases in which temporary injunction may be granted Where in any suit it is proved by affidavit or otherwise— (a) that any property in dispute in a suit is in danger of being wasted, damaged, or alienated by any party to the suit, or wrongfully sold in execution of a decree; or (b) that the defendant threatens or intends to remove or dispose of his property in circumstances affording reasonable probability that the plaintiff will or may be obstructed or delayed in the execution of any decree that may be passed against the defendant in the suit, the court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal, or disposition of the property as the court thinks fit until the disposal of the suit or until further orders. 2|Page

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2. Injunction to restrain breach of contract or other injury (1) In any suit for restraining the defendant from committing a breach of contract or other injury of any kind, whether compensation is claimed in the suit or not, the plaintiff may, at any time after the commencement of the suit, and either before or after judgment, apply to the court for a temporary injunction to restrain the defendant from committing the breach of contract or injury complained of, or any injury of a like kind arising out of the same contract or relating to the same property or right. (2) The court may by order grant such injunction on such terms as to an inquiry as to damages, the duration of the injunction, keeping an account, giving security or otherwise, as the court deems fit. ……. 4. Notice of application (1)Where the court is satisfied for reasons to be recorded that the object of granting the injunction would be defeated by the delay, it may hear the application ex parte. (2)An ex parte injunction may be granted only once for not more than fourteen days and shall not be extended thereafter except once by consent of parties or by the order of the court for a period not exceeding fourteen days. (3)In any case where the court grants an ex parte injunction the applicant shall within three days from the date of issue of the order serve the order, the application and pleading 3|Page

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on the party sought to be restrained. In default of service of any of the documents specified under this rule, the injunction shall automatically lapse. (4)All applications under this order shall be heard expeditiously and in any event within sixty days from the date of filing unless the court for good reason extends the time. 4. As submitted by the Bank, for an applicant to meet the threshold for the grant of an injunction, they must satisfy the test set out in the case of Giella v Cassman Brown & Co., Ltd. [1973] E.A. 358. The Plaintiff is required to demonstrate a prima facie case with a probability of success, that he will suffer irreparable injury which would not adequately be compensated by an award of damages and that if the Court is in doubt, it should decide the application on the balance of convenience. These conditions are to be applied as separate, distinct and logical hurdles which the Plaintiff is expected to surmount sequentially which means that if he does not establish a prima facie case then irreparable injury and balance of convenience do not require consideration (see Nguruman Limited v Jan Bonde Nielsen& 2 others [2013] KECA 347 (KLR). 4|Page

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5. As to what constitutes a prima facie case, I am in further agreement with the Bank’s submission that the Court of Appeal in Mrao Ltd v First American Bank of Kenya Ltd & 2 others [2003] KECA 175 (KLR) explained that it is, “….a case in which on the material presented to the Court, a tribunal properly directing itself will conclude that there exists a right which has apparently been infringed by the opposite party to call for an explanation or rebuttal from the latter.” 6. The Plaintiff’s case is that on 22nd August 2025, the Bank unlawfully debited Kshs.182,314.10/- from the Plaintiff's current account, which was opened to pay the mortgage, to settle its own legal fees from a separate matrimonial property dispute,that is, MCFOS E006 of 2025. He contends that this debit created a false impression of default by disrupting the account balance intended for mortgage payments and the Plaintiff claims he was not liable for the Bank's legal fees. That relying on the false default, the Bank issued backdated and defective statutory notices and threatened to sell the suit property and the Plaintiff alleges this is an unlawful exercise of the statutory power of sale, contrary to sections 90, 96, and 97 of the Land Act(Chapter 280 of the Laws of Kenya). 7. The Plaintiff accuses the Bank of unlawfully sharing his loan details with his former spouse's advocates and invited them to redeem the 5|Page

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suit property without his consent and he claims that he will suffer the irreparable loss of losing his home that cannot be compensated by damages if the sale proceeds. The Plaintiff also asserts he has a strong case with a high probability of success and that the balance of convenience favors granting the injunction. 8. In response, the Bank depones that the Plaintiff has a long history of defaulting on the loan, which began as early as December 2014 and that despite several demand letters and a 90-day statutory notice in August 2019, the Plaintiff only made intermittent payments and that the current default is not a new or manufactured issue. The Bank states that the debit of Kshs.182,314.10/- from the Plaintiff's account was contractually justified as the debit was to settle legal fees the Bank incurred in the matrimonial property suit The Bank relies on Clause 1.1 of the Charge which obligates the Plaintiff to pay all costs incurred by the Bank in enforcing or seeking to enforce payment, Clause 10.6 of the Letter of Offer which states the customer undertakes to pay all legal costs and expenses and that the court, when striking it out of the matrimonial suit, awarded it "half instruction fees plus costs" against the Plaintiff's former spouse, which the Bank legally recovered from the Plaintiff's account as per their agreement. 6|Page

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9. The Bank refutes the claim that it acted unilaterally or unlawfully, stating that the Plaintiff cannot feign ignorance of the terms of his contract and it denies that it unlawfully shared the Plaintiff's loan details with his former spouse. It depones that the Plaintiff himself voluntarily produced the loan statements in the matrimonial property suit, and that the Bank was legally obliged to disclose information in those proceedings. The Bank avers that the notices are valid and that once a statutory notice is issued, there is no legal requirement to issue a fresh one if the default persists and it reiterates that the Plaintiff has been in continuous default. For these reasons, the Bank states that the application is frivolous, vexatious and baseless and should be dismissed with costs. 10.From the pleadings and submissions, I am in agreement with the Bank that the primary grievance of the Plaintiff is the debit of Kshs.182,314.10/- from its account which is essentially is a contractual dispute between a bank and its customer. The Bank has provided the Charge and Letter of Offer, which unequivocally obligate the Plaintiff to indemnify the Bank for "…all other costs liabilities taxes expenses and charges incurred by the Chargee in enforcing or seeking to enforce payment of such monies" at Clause 1.1 of the Charge and to pay "…all legal costs and expenses" at Clause 10.6 of the Letter of Offer. The Plaintiff's argument that 7|Page

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these clauses are not applicable because he was not the party against whom costs were awarded is a matter for trial. At this point, it remains that the Bank was entitled to debit any costs it incurs in respect of the facility and the Bank's legal costs in this case were incurred because the security it held was placed in jeopardy by a dispute concerning the suit property, which the Plaintiff himself was a party to. 11.Further, to succeed, the Plaintiff must show that his right to the suit property or to be free from the debit is clearly being infringed. However, the prima Plaintiff acknowledges he facie evidence defaulted on the shows the facility, the Bank properly issued statutory notices and has a contractual right to recover its costs. I find that seeking to stop the sale is a drastic remedy as the Plaintiff is seeking to prevent the Bank from exercising a right it contractually and statutorily possesses. As stated, a prima facie case requires a showing of a right that is being infringed. In this case, the Bank appears to be exercising a legitimate right of sale and therefore, the Plaintiff has not demonstrated that the right to sell has been infringed, rather, he is disputing the procedural basis. 12.The Plaintiff states that the 2019 statutory notice is outdated and cannot be used. However, the Court of Appeal has consistently held 8|Page

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that once a statutory notice is validly issued, and default persists or recurs, there is no legal obligation to re-issue the notice (see Diamond Trust Bank Kenya Limited v Kaminara Agencies Limited & 2 others (Civil Appeal E144 of 2023) [2025] KECA 48 (KLR). The Plaintiff's failure to cure the ongoing default after 2019 means the Bank can rely on that notice and its reliance on the same coupled with the 40-day notice in 2025 is proper and legally sound. Further, even if default is in dispute, courts are generally reluctant to grant an injunction where the dispute is primarily about a monetary sum owed under a contract, especially when the Bank has a clear contractual right to recover its costs (see J. L. Lavuna and Others v Civil Servants Housing Co. Ltd. & Savings And Loan Kenya Ltd [1995] KECA 111 (KLR)] 13.I therefore find that the Plaintiff has failed to demonstrate a genuine and arguable case that his rights have been infringed and ideally his quest for an injunction ends at this point in line with the dicta in Nguruman(supra). In any event, even if the Plaintiff had established a prima facie case, he has failed to prove that he will suffer irreparable harm that cannot be adequately compensated by an award of damages. The Plaintiff offered the suit property as security for a loan and I am in agreement with the Bank that by doing so, he equated it to a commodity which the chargee may 9|Page

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dispose of, so as to recover his loan (see Maina & another v Equity Bank Limited & 2 others [2023] KEHC 23538 (KLR)]. Therefore, the Plaintiff’s loss is inherently calculable in monetary terms making it a measurable loss and not an irreparable one. 14.There is no evidence presented that the Bank would be unable to pay damages if it were eventually found to have acted unlawfully and the Plaintiff's assertion of irreparable harm is speculative and contradicted by the fact that the Bank is a well-capitalized commercial entity. 15.Since the Plaintiff has failed on the first two limbs, the balance of convenience, even if it were considered tilts in favour of the Bank as it has a clear and established right to recover the debt owed to it. The suit property is the only security it holds for a substantial loan that is in arrears and denying the Bank the ability to realize its security would leave it with no recourse to recover the money lent, potentially causing it substantial financial loss. The Plaintiff's predicament is a direct consequence of his own default and the contractual obligations he freely entered into. The inconvenience to him of losing his home is precisely the risk he accepted when he offered the property as security. 10 | P a g e

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16.The status quo is that the Plaintiff has not been paying the loan as agreed and the Bank has a statutory right to sell. Granting an injunction would alter the status quo by preventing the Bank from exercising its lawful right, thereby causing greater harm to the Bank than to the Plaintiff. Thus, the Bank's interest in recovering the debt and realizing its security clearly outweighs the Plaintiff's interest in temporarily retaining possession of the suit property. Conclusion & Disposition 17. Overall, the Plaintiff has failed to meet the threshold for the grant of an interlocutory injunction and his application dated 4th December 2025 is dismissed with costs. DATED SIGNED AND DELIVERED virtually at NAIROBI this 17TH DAY OF JULY 2026 ............................................................................ J.W.W. MONGARE JUDGE IN THE PRESENCE OF 1. Ms. Metto holding brief Mr. Kosgey for the Plaintiff/Applicant. 2. Mr. Nyongesa for the Defendant/Respondent. 3. Amos- Court Assistant 11 | P a g e

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